Transcript: Media briefing by Minister of Tourism, Marthinus van Schalkwyk, Imbizo Media Centre, 120 Plein Street, Cape Town
8 Dec 2009
Panel: Jaime Byrom, Executive Chairman of MATCH, Bert van Schalkwyk, Acting Director-General of Department Tourism, Rosh Singh, SA Tourism, Sindiswa Nhlumayo, Deputy Director-General Department Tourism, Brett Duncan, Federated Hospitality Association of South Africa (FEDHASA) Executive Director
The purpose of the media conference is to deal with issue of accommodation so we will give you a proper detailed briefing of the accommodation available in South Africa and where that accommodation is and then we will also deal with other issues like ticket sales, some transport issues and so on.
The essence of the message we would like to convey to you is that South Africa has enough accommodation for 2010. It has been a point of discussion and I have always said there is no reason to question the availability of accommodation in South Africa. So, what we want to do today is to back that up with facts and figures and in essence what we can convey to you is that we have 202 rooms available in the country.
About 107 000 of those rooms are graded by the Grading Council of South Africa so we are confident we will be able to deal with whatever for the duration of the World Cup now what is very important to distinguish here is what we have available for everybody coming here. Those 450 000 or 460 000 people that will attend the World Cup and what is generally referred to as the FIFA family and Jaime will be dealing with that.
Very often it's being confused in the media when we talk about the 55 000 rooms that FIFA needs and that is the issue that Jaime will be dealing with. Now that 55 000 rooms is basically for the FIFA family, some people who bought packages some of the sponsors etc. When we talk about at least 202 000 rooms or 107 000 which are graded we are talking about rooms for the people that are coming to the World Cup and it's important to distinguished those two issues. We would also like to convey to you what I think is a feather in our cap: two very important legacy projects the Booking Portal, Sindiswa will be giving you the detail of the booking portal and Brett is also here to answer some questions about the booking portal.
The database we have compiled after our audit of all the accommodation establishments in the country that will be used to pre-register all the accommodation establishments in our country, after our press conference Brett Duncan who is also the CEO of FEDHASA they will send out 15 000 e-mails, 17 000 SMS to say to all these establishments you have December and January available to verify all your information on that booking portal.
We want the portal to be operational early 2010 well ahead of the World Cup. The other very important legacy project is the Contact Centre there is now a single point to get all tourism related information. A single entry on a website and Sindiswa will be giving you all that detail. That contact centre is already operational 24 hours a day, seven days a week and when we come to the World Cup it will be further beefed up to make sure we provide all the information in a number of languages and she will share with you which languages that will be. So we have enough accommodation we are very confident that we can now deal with whatever will be required from us.
Questions and answers:
Journalist: The contact centre could you give us some more details? Where is it located, who is running it is it on a contract is another company running it that sort of thing and then also on the database can you give us more information on who compiled the database? Was an auditing firm involved and who was it and how long did it take. And then also the contract value if there is such a thing for the contact centre. Thank you.
Roshne Singh: I'm going to answer the question on the contact centre. It’s essentially the South African Tourism call centre which has been in operation but we have now up scaled it so that we can deal with the specific requirements for the World Cup and beyond in terms of ensuring we have the languages available and also that we have the content available. The call centre has been outsourced to a company called CCN which has been running it for a while. It did go out on tender about three years ago so it continues to be part of that. The contract value I will have to get back to you on in terms of what it would cost us when we have all the functionality in place taking us up to and beyond the World Cup.
Sindiswa Nhlumayo: In terms of the database what we did we partnered with South African Tourism (SAT) which already had an existing database and we also worked with provinces all nine provinces of South Africa as well as the Tourism Grading Council of South Africa which is responsible for quality assuring accommodation and we converged all that database and appointed the services of an auditing firm to verify it and we were able to come out with a number of accommodation that we have. So it was audited by Afrigis because we needed to check exactly where the location is and if I might also tell you that it started with a huge number but through proper verification we ended up with what we have which we are confident that it is the right one. Thank you.
Journalist: What is the difference between the accommodation earmarked by MATCH and the accommodation that the Minister was speaking of?
Jaime Byrom: Essentially the 40 000 rooms that we referred to are rooms that MATCH has contracted directly with hotels as well as non hotel establishments. Those hotel rooms are then made available to various groups of FIFA and within those allocations of rooms we obviously cater for members of the general public. I believe that the 202 000 rooms represents all rooms available in South Africa of which 40 000 happen to be contracted by MATCH. The other remaining rooms are available to anybody who may wish to stay in those rooms during their stay of the World Cup or for whatever purpose the other 160 000.
Marthinus Van Schalkwyk: So the 40 000 rooms are part of the 202 000 and then there was a figure of 4 500 rooms in neighbouring countries that is part of the 202 000 those are rooms you contracted in neighbouring countries. Jaime Byrom: The 40 000 rooms do include 4 000 rooms in neighbouring countries so we have 44 000 out of the 202 000 the other perhaps point of clarity is that the 44 000 that we have in South Africa are part of the 107 000 that are graded. So if my recollection is correct you have 202 000 rooms in South Africa, 107 000 are graded and I think in general terms all of our 44 000 are graded.
Journalist: I was wondering if you could tell us what you are seeing in terms of pricing of rooms whether you review there being a degree of opportunism from establishments and operators in terms of pricing their rooms for the World Cup. Can you give us details on how MATCH prices its accommodation that it’s contracted in is it flat fees or a mark up on that?
Marthinus Van Schalkwyk: On the first issue of pricing in general it’s very important that we protect our reputation and our integrity as a value for money destination that is what we market ourselves as in all our discussions with the industry, Tourism Business Council, FEDHASA. I must say that they are cooperating with us very closely to ensure that we don't put that reputation at risk.
At the moment I don't detect any general threat of people wanting to rip off tourists wanting to increase prices beyond what it should be. What is important to understand and acknowledge is that unlike previous June and July’s which is low season next year June and July is high season for us it’s important to understand that. So generally speaking I don't see any sign of a hiking of prices in the industry what I see in the newspapers there was a report in a Sunday newspaper is where people want to rent out their private houses to billionaires coming to South Africa.
I've seen incredible prices according to newspaper reports being paid for in Camps Bay for instance my view in that regard is that if those billionaires want to pay these prices for private homes the market determines that and its outside of the normal hospitality industry and it’s a question of supply and demand.
Jaime Byrom: Essentially let me answer your question by dealing exclusively with the hotels and then I will come into the small and medium enterprise's (SME's). During the bid process FIFA enter into agreements through SAFA with hotel establishments that were part of the bid process its part of the list of requirements FIFA has to stage a FIFA World Cup in a host country. The way the contract works is as follows: you are required to confirm your rack rates your published rates for the month of June and July 2007 that's when you are intended to declare what you rack rates are at that time.
We then look at the inflation rates of the preceding three years and whatever that percentage happens to be is then added to adjust the 2007 prices to 2010 June/July period. From that rack rate MATCH receives a discount of 30% so therefore the hotels receive what would effectively be 70% of the rack rate that is the way the hotel rooms are priced now MATCH then has an agreement with FIFA that requires us to provide different levels of discounts to different types of customers.
Some customers receive a 10% discount of what would have been the hotel's rack rate some customers receive 20% and some customers receive no discount of that 30%. In terms of the SMEs or in terms of the non hotel service providers we find that price model would not work in South Africa simply because when it comes to the smaller establishments they are not use to working on the basis of rack rates they have a rate which they accustom to receiving from their customers.
So unlike hotels who have different discount levels to different types of customers as far as the SME's we found that we had to agree was a price that would be paid to the non-hotel establishment so we took their price took it as being the equivalent of their normal rate and then we gross that up so that we would have the same 30% margin that we would otherwise have had if they had been hotels and again from that World Cup rate we then to proceed to provide discounts depending on who the customer is. Does that answer your question?
Journalist: The maximum that MATCH can make is a 30% mark up on the base level that the hotel charges plus an inflation adjustment from 2007 is that correct?
Jaime Byrom: We took the prices for 2007 we added the inflation rate so that we would have a price to go to the market three years out so we could confirm to our clients what the price would be from that price we receive a 30% discount which is normal in the industry whether you are a wholesale or a tour operator you receive discounts for different levels and therefore the maximum price that you may pay through MATCH for those rooms is that rack rate or that FIFA World Cup rate if however you are commercial affiliate or any of the constitute groups that is entitled to a discount you might pay the rack rate minus 10% or even 20%.
The difference came and there is not a mark up that is basically a discount of a World Cup rate where the differences occur was when you are dealing with a bed and breakfast. A bed and breakfast is not use to providing tour operator discounts or corporate rates, they don't have a sophisticated rate structure they have a price which they receive from their guests and it's for that reason we looked at prices in a different way to the way that we did with hotels.
Journalist: The portal is a real time booking engine or is just an information website and then you book with the institution or the establishment directly? And then is there going to be a drive to increase the graded accommodation available on the website. And then one for MATCH in terms of Mauritius what are the plans to provide flights between the island and the various host cities?
Brett Duncan: The booking portal will be real time it’s going to be available to all guests looking for accommodation both local and international and the only way that is acceptable is real time booking and payment for confirmation of the booking.
Journalist: From the Tourism Grading side now that we have very specific details on who is ungraded and we know where they are obviously our marketing drive will be to encourage all those establishments to get graded and needless to say our business plan will be measured accordingly.
Jaime Byrom: With regard to Mauritius we have contracted a total of 3 200 rooms in Mauritius. We found that because of the logistical challenge of bringing people 21 of 64 matches that we had to wait for the draw so that we could target specific matches so that people who select to stay in Mauritius could then be provided with the necessary logistics to get to South Africa on a day of a match and return trip. So we found that to put together a programme that will offer all 48 group matches and then wait and see which match it was, was simply beyond us.
So what we have done we have waited for the draw we now know there is a match for example Brazil versus Portugal which we are going target as a viable match and then we will work on putting the logistics in place so that we can bring people on a trip to the match venue and then fly them back to Mauritius. So instead of looking at as a general program which is what we have done with the other matches in so far as Durban, Cape Town and the Garden Route we were able to anticipate taking people for all 48 matches because it's that much easier to deal with domestic flights. For Mauritius we are looking at specific matches that we are going to target so that we can bring people on these return trips.
Journalist: My question is both to the Minister and Mr Byrom a few weeks ago Mr Byrom was at the tourism committee in Parliament and in his presentation he showed the average rates in both US dollars and Rands for the various types of accommodation that is available and contracted to MATCH and in those the SANPARKS accommodation for example was the most expensive for R4 500 a room which is more than all other types and more than SANPARKS on average rate outside of World Cup. So what would the Minister's response be if a Bed and Breakfast establishment says well look SANPARKS is making an average of R4 500 from the World Cup why can't I make a relatively inflated figure for my establishment? Thank you.
Jaime Byrom: I think it's important to understand if you go to a park you get far more than just a bed for the night so I think the prices that you are looking at are inclusively of the various facilities that you find in a game park. I'm convinced that the price we received not only from SANPARKS but also other lodges are fair prices for what you get and again the pricing formula that I described to our colleague is exactly the same for SANPARKS.
As for others so in the case of SANPARKS whatever price we have published is to be discounted if a discount applies or the amount that is payable to the SANPARK property represent 70% of the price we have published in the website. I certainly as a customer of SANPARKS I have no issues and no complaints you do get what you pay for if I may say so.
Marthinus van Schalkwyk: Also on the issue of SANPARKS it's for more people than just one it might be in a chalet for four people as oppose to one person in a hotel room.
Journalist: The Minister said in his briefing that June and July next year is high season for South Africa and not low season. 2007 was low season so you are basing your pricing on low season rates? Is that correct?
Jaime Byrom: I think I'm not the most experience person in terms of seasonal rates in South Africa but I can tell you we have received what is the rack rate for the months of June and July. I think there is no question in my mind that the rate is what I would describe as the rack rate it just may be that typically in a month of June and July hotels could provide a greater discount than they would normally do if it were during the high season so that rates do confirm to our definition in the contract as being the published rates of the hotels.
Journalist: When you talk about the 15% of the SMEs would it be fair to assume that is the township Bed and Breakfast is that correct? Is that in informal settlements or what?
Jaime Byrom: No not necessarily to us an SME is a Bed and Breakfast or guesthouse wherever it may be located that is our definition of an SME.
Issued by: Department of Tourism
8 December 2009
Issued by: Department of Tourism
8 Dec 2009
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